No more IM… more IM

It has been a marathon, with extra sprint by the end of the finish line.

In the last week of March, my teammates and I worked hard enough to pretend to live like real investment managers, or to quote Professor Hammami, “60 hours A WEEK!”, to polish and wrap up our project for FINE 441 “Investment Management” course.

It was a hard project. Coming up with a cool team name on Day 1 was fun – our team name is “Sawy & Partners”, and the word “Sawy” is made of the initials of the teammates, Sally, Andrei, Wenna and Yuanhang (me) – but everything afterwards were new, and exciting, and difficult.

First of all, what real-life clients want can really be beyond our imagination. When teams sit together and talk about their potential clients, we cannot help but feel like 85% of an investment manager’s salary is paid for his “customization” work. We have seen textbook investor behaviors in textbooks, but it’s a whole new feeling when a good advice from you can actually benefit your client, a real person.

But investment managers aren’t just proxy workers for what the clients can do themselves. With the help of all the database we have access to, we need to come up with stocks, bonds and other financial tools that make sense to add into your portfolio in economics. Another challenge was to find the portfolio’s risk preferences, i.e. what risks should we take and what not, and analyze them against the potential candidates of our portfolio. This is where we start to talk numbers.

Then, in comes statistics. After gathering tons of information about what the clients want/need/hate, which assets we want to consider, and what risk factors we need to keep in mind, we translate these English-language descriptions into numbers and formulas. That’s where statistics comes in and haunts us. It was a simple process, but extremely easy to make mistakes in. When numbers are chained by Excel references to arrive at a final return expectation, I couldn’t overcome the fear of having made some tiny but deadly mistake on the reference chain. At the end of the day, coming up with numbers concluded most of the work.

Again, it was a hard project, but also so rewarding. I was amazed by how investment management can be about art and science at the same time. It helps me to not only get to know the finance world a bit more, but also realize how much out there I still don’t know about, and motivates me to find out more about investment management post this course.

Thank you for reading – unfortunately I cannot provide the deliverable file due to client privacy.